An increase in demand has helped to moderate rate declines in the July reinsurance renewals, according to Guy Carpenter.
Price declines continued to moderate at the renewals, predominately on programmes covering US wind, said the broker.
“In July, for the first time over the last three renewal seasons, many markets were in a position of dwindling aggregate for US wind-exposed zones,” said the broker.
Since spring 2014, demand for worldwide property catastrophe coverage has continued to grow at 8 percent based on current analysis. This is primarily due to new entities purchasing coverage and companies using a portion of their savings to enhance coverage, fill in gaps or to provide additional coverage as they expand their business.
It added that increased demand for reinsurance and expansion of tailored coverage persisted through the July renewal period from previous seasons.
Lara Mowery, managing director and head of global property specialty for Guy Carpenter, said: “It was hard to imagine based on the two previous years that we would hear a reinsurer reference lack of capacity as a reason for cutting back on a program, but this did occur at times this June and July.
“There is certainly no capacity shortage overall and reinsurance capital has grown once again. However, the combination of a significant increase in limit purchased and margins that have continued to thin, created a dampening on the market’s response to additional rate pressure, particularly with regard to US wind.”
Guy Carpenter, Reinsurance Renewals, Bermuda, North America, Lara Mowery